loanDepot, Inc 8-K, filed Mar 23, 2021
loanDepot, Inc. (LDI)
8-K
2021-03-23
For: 2021-03-22
View Original
Added on
April 09, 2026
About this 8-K
loanDepot, Inc filed this 8-K on March 23, 2021, reporting on events of March 22, 2021.
Items reported
- Item 7.01: Regulation FD disclosure
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): March 23, 2021
loanDepot, Inc.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 001-40003 | 85-3948939 | ||||||||||||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) | ||||||||||||
26642 Towne Centre Drive
Foothill Ranch, California 92610
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (888) 337-6888
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | ||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
| Class A Common Stock, $0.001 Par Value | LDI | New York Stock Exchange | ||||||||||||
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 7.01 Regulation FD Disclosure.
loanDepot, Inc. (the “Company”) is disclosing under Item 7.01 of this Current Report on Form 8-K the information attached to this report as Exhibit 99.1, which information is incorporated herein by reference. This information, which has not been previously reported, is excerpted from a preliminary offering memorandum that is or will be disseminated in connection with the Offering (as defined below).
The information included under this Item 7.01 on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), except as shall be expressly set forth by specific reference in such a filing.
Item 8.01 Other Events.
Notes Offering
On March 23, 2021 LD Holdings Group LLC (the “Issuer”), a subsidiary of the Company, issued a press release, a copy of which is attached hereto as Exhibit 99.2 and incorporated herein by reference, announcing its proposed offering of senior notes due 2028 in a private transaction pursuant to Rule 144A and/or Regulation S under the Securities Act (the “Offering”).
Forward Looking Statements
Some of the statements contained in this filing and other reports, filings, and other public written and verbal announcements are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are generally identified by the use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. These forward-looking statements reflect our views with respect to future events as of the date they were made and are based on our management's current expectations, estimates, forecasts, projections, assumptions, beliefs and information. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. All such forward-looking statements are subject to risks and uncertainties, many of which are outside of our control, and could cause future events or results to be materially different from those stated or implied in this document. It is not possible to predict or identify all such risks. These risks include, but are not limited to, the risk factors that are described under the section titled “Risk Factors” in our filings with the Securities and Exchange Commission. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this filing and in other filings. We expressly disclaim any obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| loanDepot, Inc. | ||||||||
| By: | /s/ Patrick Flanagan | |||||||
| Name: Patrick Flanagan | ||||||||
| Title: Chief Financial Officer | ||||||||
Date: March 23, 2021
Exhibit 99.1
Recent Developments
While the financial markets have demonstrated significant volatility due to the economic impacts of COVID-19, interest rates have fallen to historic lows resulting in increased mortgage refinance originations and favorable margins. Our efficient and scalable platform has enabled us to respond quickly to the increased market demand. Market demand in 2020 was driven by a prolonged period of historically low interest rates. This demand contributed to gain on sale margins reaching levels that the Company does not believe will be sustained in future years and could result in decreases in revenue.
As a servicer, we are required to advance principal and interest to the investor for up to four months on GSE backed mortgages and longer on other government agency backed mortgages on behalf of clients who have entered a forbearance plan. As of February 28, 2021, 1.91%, or approximately $2.4 billion UPB, of our servicing portfolio was in active forbearance. The following charts show the progression of forbearance requests in our servicing portfolio following the passage of the CARES Act on March 27, 2020.
While these advance requirements may be significant at higher levels of forbearance, we believe we are very well-positioned in terms of our liquidity. We will continue evaluating the capital markets as well, which would further supplement our liquidity should the need arise.
While we have historically engaged third-parties as subservicers, we have begun servicing a portion of our new originations on our in house platform in February, which is in line with our plan to bring substantially all of our servicing operations in-house by Q1 2022.
In February 2021, loanDepot, Inc. (“LDI”), our ultimate parent, completed its initial public offering (“IPO”) on the New York Stock Exchange, raising net proceeds of $36.2 million after deducting the underwriting discounts and commissions. In connection with the consummation of the IPO, LDI issued to the Parthenon Stockholders 121,368,600 shares of its Class D common stock, $0.001 par value per share in exchange of LD Investment Holdings, Inc.’s equity interests in the Issuer. Additionally, LDI issued 201,422,212 shares of Class C
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common stock, $0.001 par value per share to certain of the continuing members under the Issuer’s Fourth Amended LLC Agreement. As a result of such transactions, LD Investment Holdings, Inc. merged with and into LDI, with LDI remaining as the surviving corporation. LDI and the Issuer also entered into a tax receivable agreement (the “Tax Receivable Agreement”) with the Parthenon Stockholders and certain Continuing LLC members. In connection with the foregoing transactions, the Parthenon Stockholders and certain other persons has caused to be terminated an existing call option providing the Parthenon Stockholders the option to purchase, from LD Investment Holdings, Inc., its equity interest in LDLLC.
In February 2021, the Company issued notes through a new securitization facility (“2021-1 Securitization Facility”) backed by a revolving warehouse line of credit. The 2021-1 Securitization Facility is secured by newly originated, first-lien, fixed rate residential mortgage loans eligible for purchase by the GSEs or in accordance with the criteria of Ginnie Mae for the guarantee of securities backed by mortgage loans. The 2021-1 Securitization Facility issued $500.0 million in notes and certificates that bear interest at 30-day LIBOR plus a margin. The 2021-1 Securitization Facility will terminate on the earlier of (i) the three year anniversary of the initial purchase date, (ii) upon the Company exercising its right to optional prepayment in full and (iii) the date of the occurrence and continuance of an event of default.
In March 2021, we notified the lender of our Second Secured Credit Facility of our intent to terminate the facility, which provided for $100 million of financing capacity secured by servicing rights. At December 31, 2020 there were no draws outstanding on the Second Secured Credit Facility. This termination, the decreasing level of secured MSR financing relative to our portfolio size, as well as our issuance of the Senior Notes Due 2025 and this offering represent our shift toward using longer-term unsecured debt to finance our MSR portfolio.
Below, we present certain preliminary estimated unaudited financial results and key performance indicators for the two months ended February 28, 2021. The unaudited estimated financial results and key performance indicators set forth below are preliminary and subject to revision based upon the completion of our quarterly financial closing processes for the three months ended March 31, 2021. The information presented herein should not be considered a substitute for the financial information and performance indicators to be filed in our Quarterly Report on Form 10-Q for the three months ended March 31, 2021 once it becomes available. For additional information, see “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors.”
| ($ in thousands) | Two Months Ended | Three Months Ended | Two Months Ended | |||||||||||||||||
| (Unaudited) | February 28, 2021 | December 31, 2020 | February 29, 2020 | |||||||||||||||||
| Rate lock volume | $ 30,924,323 | $ 49,711,270 | $ 17,541,285 | |||||||||||||||||
| Loan origination volume | 25,079,681 | 37,395,352 | 9,269,727 | |||||||||||||||||
| Gain on sale margin | 3.21% | 3.38% | 3.67% | |||||||||||||||||
We believe that the level of gain on sale margin experienced during two months ended February 28, 2021 was the result of continued favorable market conditions and the low interest rate environment which led to increased demand for mortgages as compared with the two months ended February 28, 2020. In recent weeks, the mortgage industry has experienced an increased interest rate environment, which has led to lower refinance mortgage demand and lower gain on sale margins that more closely approximate historical gain on sale margins. We cannot predict the continued impact of an increased interest rate environment on our originations or gain-on-sale margins. Further, there is no assurance that these preliminary results will be indicative of our final results for the three months ended March 31, 2021 or in any future period.
Our preliminary results contained in this offering memorandum have been prepared in good faith by, and are the responsibility of, management based upon our internal reporting for the two months ended February 28, 2021. Ernst & Young LLP has not audited, reviewed, compiled or performed any procedures with respect to these preliminary results. Accordingly, Ernst & Young LLP does not express an opinion or any other form of assurance with respect thereto.
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loanDepot Announces Launch of Private Offering of Senior Unsecured Notes
Foothill Ranch, California, March 23, 2021 – loanDepot, Inc. (NYSE: “LDI”) announced today that its wholly-owned subsidiary, LD Holdings Group LLC (the “Company”) intends, subject to market and other customary conditions, to offer $500 million in aggregate principal amount of senior unsecured notes (the “Notes”) in a private offering (the “Offering”). The Notes will initially be guaranteed by Artemis Management LLC, loanDepot.com, LLC, LD Settlement Services, LLC and mello Holdings, LLC, each a wholly-owned restricted subsidiary of the Company.
The Company intends to use the net proceeds from this Offering for general corporate purposes, including to pay down certain operating indebtedness, and to fund a special dividend to the Company’s equityholders through a distribution to holders of loanDepot, Inc.’s Class A and Class D Common Stock and to holders of Holdco Units in the Company.
The Notes have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), any state securities laws or the securities laws of any other jurisdiction, and may not be offered or sold in the United States, or for the benefit of U.S. persons, except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities or blue sky laws. Accordingly, the Notes and related guarantees are being offered only to persons reasonably believed to be “qualified institutional buyers,” as that term is defined under Rule 144A of the Securities Act, or to non-“U.S. persons” outside the United States in accordance with Regulation S under the Securities Act.
A confidential offering memorandum (the “Offering Memorandum”) for the Offering of the Notes, is being made available to such eligible persons. The Offering is being conducted in accordance with the terms and subject to the conditions set forth in such Offering Memorandum.
This press release does not constitute an offer to sell or purchase, or a solicitation of an offer to sell or purchase, the Notes or any other security. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such an offer, solicitation or sale would be unlawful.
Cautionary Statement Regarding Forward-Looking Information
This press release contains “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect the Company and its subsidiaries’ (collectively, "loanDepot") current views with respect to, among other things, its operations and financial performance. You can identify these statements by the use of words such as “outlook,” “potential,” “continue,” “may,” “seek,” “approximately,” “predict,” “believe,” “expect,” “plan,” “intend,” “estimate” or “anticipate” and similar expressions or the negative versions of these words or comparable words, as well as future or conditional verbs such as “will,” “should,” “would” and “could.” These forward-looking statements reflect loanDepot’s views with respect to future events as of the date they were made and are based on loanDepot’s management's current expectations, estimates, forecasts, projections, assumptions, beliefs and information. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give
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no assurance that these expectations will prove to have been correct. All such forward-looking statements are subject to risks and uncertainties, many of which are outside of loanDepot’s control, and could cause future events or results to be materially different from those stated or implied in this document. It is not possible to predict or identify all such risks. These risks include, but are not limited to, the risk factors that are described under the section titled “Risk Factors” in our filings with the Securities and Exchange Commission. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this filing and in other filings. loanDepot expressly disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.
About loanDepot:
loanDepot is a contemporary financial services company dedicated to delivering a best-in-class experience to its mortgage purchase and refinance customers. Founded in 2010, loanDepot offers a diversified network of direct-to-consumer, in-market, and partner business channels, uniquely positioning it to serve a wide range of customers. Headquartered in Southern California, the Company has funded more than $300 billion since its founding and currently ranks as the second largest retail nonbank lender and one of the leading retail mortgage lenders in the United States. Committed to serving the communities in which its team members live and work, loanDepot has donated millions of dollars to support a variety of local, regional and national philanthropic efforts, most recently giving more than $2.5 million to help with COVID-related efforts for first responders, healthcare workers, individuals and families nationwide. The Company also is a founding sponsor of War Heroes on Water, which supports ongoing therapeutic healing services for combat-wounded veterans nationwide.
Investor Relations and Media Contact:
Abe Gutierrez
Vice President, Investor Relations
(949) 860-8215
ir@loandepot.com
or
Nicole Carrillo
Executive Vice President, Chief Accounting Officer
(949) 575-5187
ir@loandepot.com
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